Dr. Martin Hickey says his job is both easier and harder than it sounds.

As the CEO of New Mexico Health Connections, Hickey has the task of starting a new health plan from scratch, from hiring employees to negotiating with doctors and hospitals and setting prices that will make the plan’s policies competitive.

The difficulties are obvious. New Mexico has four major health plans that insure more than 1 million people. The state is poor, and most employers that can afford to insure their employees already have.

Having $6 million to obtain all the things needed to start a new health plan seems a little slim. And having to start selling policies to individuals and businesses by October 2013 doesn’t leave much time.

But the effort has some advantages.

New Mexico Health Connections, a nonprofit health plan mandated by the federal Affordable Care Act and funded by the U.S. Centers for Medicare and Medicaid Services, doesn’t have hundreds of employees or millions of dollars in overhead costs, and it doesn’t have any pre-existing health care models it has to maintain while trying to innovate and lower health care costs.

“You need a shovel,” Hickey says when asked how one goes about starting a health plan from scratch. “This is a very complex business, and there are an infinite number of details that have to be worked through.”

One big advantage is not having to merge different computer programs built at different times and filled with various types of information about clients into one seamless program.

“When you have a lot of data on a lot of people and you have to transfer it from one platform to another, all hell breaks loose. It’s miserable,” says Hickey, who headed Lovelace Hospital and the Lovelace Health Plan in the early 2000s, before the system was purchased by Ardent Health Services of Nashville, Tenn.

“We are getting close to identifying a vendor for all our informatics, and who can do the back-office operations, which is enrollment, claims paying, utilization review, some case management and data reporting to the doctors. What makes data informatics such a nightmare for health plans are the interfaces between the different programs,” Hickey explains.

“The hardest part will be getting one vendor, and the easiest part will be getting one vendor, because whatever mistakes they were going to make, they have made them with previous clients and they don’t have to make them with us.”

So far, CMS has funded seven of the consumer-based health plans around the country with $690 million.

Hickey said that because the plans are a new concept, no one knows whether they will be successful.

Craig Hewitt, CIO for Albuquerque-based LCF Research, a nonprofit that is helping create New Mexico’s new health information exchanges, said Hickey’s challenges are similar to what LCF faces.

“From our perspective, it basically will allow us to collaborate, because we’ve built similar electronic highways for the HIE,” Hewitt said. “It’s about building the network around the patient and connecting those involved in their care with the information that is needed to provide that care.”

The new health plan will sell policies on New Mexico’s individual and business health insurance exchanges.

According to a recent report by the Con Alma Foundation, the insurance exchanges would make it easier for small businesses and their employees to buy insurance. However, it is not known if the yet-to-be established exchanges will be successful, the report said.

“A large number of small employers must participate in the exchange for it to succeed,” the report said. “At this point, however, most New Mexico small employers know very little about the Affordable Care Act” or the insurance exchange.

New Mexico Health Connections will pursue a patient-centered medical home model that emphasizes keeping patients healthy instead of treating them after they’re sick. Because primary care doctors will be at the center of the model, they will provide a patient with coordinated care, from medications to dietary advice to behavioral health services.

“We want to be a culture of health, and not react to a culture of sickness,” Hickey says. “We want to recognize the primary care physician’s role in doing that, and we also want to get them better compensated than they have been.”

Medical homes are being used much more extensively in other states and have been found to save money and provide better medical care, Hickey adds. The medical homes are part of a shift in health care that is changing the emphasis from doing lots of procedures on lots of patients to providing services that have real value, Hickey adds.

“The system is running out of ways to pay for itself, and people across the country are experimenting with a lot of different ways to provide insurance because they see the spiral coming and they know that it is just not sustainable.”